You have probably already heard about Blockchain. It is the technological basis for many digital currencies, but it is also emerging as an alternative to widely used technology for many other domains.

Here at Coletiv, we tried exploring more about the topic of Blockchain, but, being such a generic technology, we needed a specific area of application. After pondering both the benefits it could bring and the needs it could satisfy, we chose to develop a proof-of-concept (PoC) that could apply blockchain technology to a supply chain.

This is the first article of a 2-part series, detailing the problems in the supply chain, how blockchain can be applied to fix them, and providing a PoC implementation example.

Part 1 — The need for a Blockchain ready Supply Chain Management System Part 2 — Implementation of a proof-of-concept using Hyperledger Composer

This article was written as part of a Master Thesis titled “Supply Chain Management with Blockchain Technologies” which can be accessed here (direct download).

Why apply Blockchain to a concept like Supply Chain?

Is anything wrong with supply chains?

Modern supply chain industries encompass the flow of materials and products among various organizations, whose relationships intertwine in many complicated ways. This makes for a rather complex ecosystem in which a simple delay in the transmission of goods can have a “snowball effect” and severely affect the delivery cycle times.

Complexity of a garnments supply chain

At the same time, inventory and asset management, as well as supply and demand predictions are easily thrown off whenever a change, be it expected or not, occurs in the Supply Chain. A higher accuracy of the information and faster transmission of these changes to the forecasting systems logically leads to better predictions, which is an objective of any business. After all, we all want to reduce our costs to a minimum, don’t we?

The accuracy and speed of transmission of the information doesn’t only affect predictions. The transmission of the goods themselves, through shipments, can be hastened simply by having the necessary documents and product information readily available, so that any problems, like customs clearance, is faster.

What can we do to fix these issues?

It is time to make the Supply Chain more integrated with the world and among companies. More information. Easier synchronization. A scalable structure. Blockchains might be just the way to achieve these goals.

Some of the main objectives for applying Blockchain to the supply chain management domain are:

• Making information digital and providing general data accessibility, so that the information can be synchronized between systems in an easier and faster way. This can be done by using blockchain as the basic information layer, the source of truth that other systems can query.

• Tracing products during their life cycle, therefore contributing to the adherence of quality standards, as well as improving the consumer’s and other company’s trust.

Blockchain — Public? Private?

By looking at all the requirements of a modern supply chain, we can easily derive that the data is sensitive, and needs to be managed as such. Blockchains can be broadly divided into two generic groups:

• Public: practically anyone can host a peer, leaving the information accessible to the public

• Private: accessible only to specific members of a network, and the ability to view and edit information is usually limited, giving rise to what are called permissioned blockchains.

  So, which one would you choose to store and transmit important information from a company’s transactions?

  With data being sensitive, the decision we made was the one that seemed the most adequate: to use a private permissioned blockchain. Hyperledger provides the tools to build these type of blockchains.

Hyperledger Projects — Fabric, Composer and beyond!

“Hyperledger” itself is an umbrella term for a diverse number of open source blockchain projects, including various development frameworks and tools.

However, with so many projects to choose from, which ones are the most useful for a PoC?

Fabric and Composer

Hyperledger Fabric and Hyperledger Composer are two of the projects with the most synergy and maturity out of the many Hyperledger projects — Fabric is already active, Composer is in incubation, but nearing release.

Together, they allow for the development of highly customizable private blockchain networks, with identity management tools as well as easy integration with other technologies and services (even IoT networks).

We actively encourage you to take your time and check out the documentation for both projects (but beware, Fabric’s documentation is quite extensive):

• Fabric Documentation (v1.2)

• Composer Documentation

There is also a plethora of videos introducing the frameworks in detail and showing practical cases of small network implementations. Especially for Composer, the project has an online playground with easy to understand example models that you can easily deploy, test and alter to your will.

Conclusion

In the end, Composer abstracts most of the work done in Fabric, leaving a lot of boilerplate out of the way. It is easier and faster to deploy a PoC on Composer. Of course, using Fabric standalone will have its own benefits, since it allows for a more refined low-level implementation, but that does not take away any merit away from Composer, especially since it was designed to extend Fabric.

Finally, being two customizable technologies (even the type of consensus and underlying database can be changed), they allow for many different designs. The implementation that is proposed and explained in the next article is just one of many possible designs for the supply chain domain.

Part 2 follows with an implementation of the PoC using Hyperledger Composer.